Bay Area car dealers fear ripple effect of quake

JAPAN QUAKE

Andrew S. Ross

Published 4:00 am, Tuesday, March 15, 2011

Photo: Str, AFP/Getty Images

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An aerial shot shows vehicles ready for shipping being carried by a tsunami tidal wave at Hitachinaka city in Ibaraki prefecture on March 11, 2011. A massive 8.8-magnitude earthquake shook Japan, unleashing a powerful tsunami that sent ships crashing intothe shore and carried cars through the streets of coastal towns. less

An aerial shot shows vehicles ready for shipping being carried by a tsunami tidal wave at Hitachinaka city in Ibaraki prefecture on March 11, 2011. A massive 8.8-magnitude earthquake shook Japan, unleashing a ... more

Photo: Str, AFP/Getty Images

Bay Area car dealers fear ripple effect of quake

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The effects of Japan's calamitous earthquake and tsunami are being felt far and wide, including among Bay Area car dealers.

With automobile production having ground to a halt there, many dealers are wondering what will happen to their supply of Toyotas, Hondas, Nissans and other Japanese models, which account for almost half of all new car sales locally.

"The Prius is our bread and butter," said Kent Putnam, owner of Putnam Toyota on Burlingame's Auto Row. "Right now, we've got about one month's supply. Unless there's a ship in port or at sea, that could be it for the foreseeable future."

The Bay Area happens to be the biggest market for the Prius outside of Japan.

While a number of Japanese models, including Hondas and Nissans, are manufactured in the United States, others, including the Prius and Toyota's Scion and Honda's Fit - both also popular in the Bay Area - are not.

Most Japanese manufacturers have suspended production, both inside and outside the earthquake zone, at least through Wednesday.

"If the shutdown lasts for more than a week, it will definitely impact shipments - of both cars and parts," said Welch.

"It's not likely if you were expecting delivery this week or next that you'd be impacted," Rebecca Lindland, a director at consulting firm IHS Automotive told the Associated Press. "It's the people that are four, six and eight weeks out that (are) going to see a delay in that delivery process."

Toyota dealers in the Bay Area may have the most to worry about. Toyota's various brands far outsell those of any other automaker, foreign or domestic, in the Bay Area.

"Not only is the struck region one of our production bases, (but) those directly hit and vastly affected include our suppliers and numerous other partners," ToyotaMotor Co. President Akio Toyodasaid in a statement.

"There could be some issues where customers don't get the exact vehicle that they want," Jessica Caldwell, an analyst with auto website Edmunds.com, told the AP.

A spokesman for Honda, whose brands, including the Civic and Accord, are second in sales to Toyota in the Bay Area, said 80 percent of its cars sold in the United States are built in North America. The impact of Japan's earthquake would probably be felt less by Honda than by other Japanese car companies, he said.

For Nissan, whose lines, including the Versa and Maxima, also sell well in the Bay Area, the situation is "extremely fluid," said Paula Angelo, a spokeswoman for Nissan North America.

A shipment of Nissan Leafs destined for the U.S. market - the Bay Area has the largest number of reservations for the new, all-electric vehicle - left a Japanese port just before the quake hit. An additional 1,300 U.S.-bound Nissans were damaged before departing from the Port of Hitachi in one of the areas hit worst by the tsunami.

"We're trying to assess next steps," Angelo said.

Nissan's U.S. and Canadian plants, where the bulk of its cars for the American market are manufactured, continue to operate and, "There are sufficient vehicles for the time being," she said. At the same time, parts, which are sourced "globally," are "another of the areas we are assessing."

That's true for other Japanese cars manufactured in North America, as well as for U.S. carmakers who are dependent on their just-in-time inventories of Japanese-made and distributed parts, such as transmissions, EV battery packs and electronic semiconductors.

"Although the human cost is of paramount concern, the ripple effect of the stoppages to supply and production in Japan will be felt in many parts of the world, including the United States, as many key parts and technology are exported from Japan," said IHS Automotive in a report issued Monday.

Even as Japan's automotive assembly lines and parts manufacturers start to roll again, getting the finished goods to their destinations may be another matter, given "disruption to the country's transport infrastructure, affecting everything from parts delivery, personnel mobility and shipping activity at the country's ports," the IHS report said.

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-- Hopefully, the situation will have improved sufficiently when Nissan opens "one of the largest automobile retailing locations in the United States" in San Francisco later this year, at the old Ellis Brooks showroom on Van Ness Avenue.

"Our company has not had a presence in downtown San Francisco since 2004 (Nissan) and 2007 (Infiniti)," Angelo said. "We believe that the (seven-story, 195,000-square-foot) facility will help us grow sales across the region and strengthen our competitive position relative to other automakers such as Honda and Toyota."

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